Please see attached file for full problem description.
1) Let τ be a random variable which measures the time one has to wait for an event, such as default of a bond. As one can observe, the distribution of τ has the following
f(t) = ( λ > 0 is given )
a) Given any time t > 0, find the probability that one has to wait longer than t.
b) Find the cumulated density function Fτ for τ. ( Find the framework)
This is a set of problems that relate to wait time and probability.